The Uttam brand of companies in India are reportedly proceeding with talks with foreign investors in an effort to avoid full insolvency proceedings. The Miglani controlling family is seeking investments due to the improved steel market in India compared to a year ago. Analysts estimate that valuations for both companies could be close to covering the Rs 60 billion ($872 million) in aggregate debt.
According to the ICRA agency, domestic steel consumption grew by 7.9 percent in 2017-2018. In the final fiscal quarter, or Q1 2018 in calendar terms, key drivers for the demand were the automotive and construction sectors, thereby improving prices for both hot rolled coil and long steel.
Resolution at Uttam Galva Steels could now depend on an NCLAT order as the next hearing for insolvency review is scheduled for July 18. Uttam Value Steels’ insolvency proceedings are expected to continue into December.
Uttam Galva Metallics and Uttam Value Steels together support the entire product chain, from pig iron to galvanized steel. Annual capacity in the two companies is about 500,000 mt each, and the new plan includes increasing the total for both to 2 million mt.